Graphite : Introduction
The industrial application of graphite is basically applied in the form of anodes in lithium-ion batteries, acting as heat-resistant for furnaces and casting equipment, coating foundry moulds, brake linings, carbon brushes and lubricants, and many others. The need for graphite globally is anticipated to grow massively on account of increasing demand for batteries for use in electric vehicles and renewable energy storage. As per the market data, by 2030, the potential for graphite demand is projected to reach four million tons every year, approximately 75% of which is for the lithium-ion battery market. Presently, the bulk majority of graphite is sourced from China. The highest-profile Australian-focused company in this particular area is Renascor Resources Limited (ASX: RNU), which owns the Siviour battery anode material project in South Australia. Siviour holds substantial graphite reserves. South Australia contains 66% of Australia’s confirmed graphite resources, as per the Department for Energy and Mining 2022. According to benchmark mineral intelligence, demand for anodes experienced a growth of 46% in 2022, while supply of flake graphite, the most geologically common form of natural graphite, experienced 14% growth the previous year. There are many Australian companies looking to ignite the local graphite industry. Some are not only focused on producing raw materials but also developing a downstream offering as well.
Investing in ASX graphite Stocks
The sense of emergency in de-carbonization has been intensifying as the whole world pursues a zero-carbon mission. The demand for graphite has been growing in popularity in recent years. Applications as battery minerals are realized and as the developmental need for electrical vehicles surges around the world Graphite is highly conductive and invaluable in electronics. Natural graphite comes in different forms, each with its own valuable applications in modern technology. Australia has an embedded resource estimate of 5 million tons of ore reserves and 7.97 million tons of economic demonstrated resources, as per the Australian government data published in 2022. The consumption of electrical vehicles is growing by approximately 40% month over month.
What are ASX graphite shares?
Australian companies are actively involved in the production and refinement of graphite. These companies listed on the Australian Securities Exchange are basically Australian graphite shares. Graphite has various industrial uses, mainly as anodes in lithium-ion batteries. The other usages are in coating foundry moulds, brake linings, carbon brushes, and lubricants. The global demand for graphite is anticipated to increase due to the rapid demand for batteries for use in electric vehicles (EVs) and renewable energy storage.
Syrah Resources Limited (ASX: SYR)
Black Rock Mining Limited (ASX: BKT)
Talga Group Limited (ASX: TLG)
Renascor Resources Limited. (ASX: RNU)
Pros and cons of investing in ASX graphite shares
The importance of graphite is rapidly increasing because of its broader applications in industrial usage. The demand for graphite remains stable over time. The graphite-producing ASX shares have a strong correlation with the renewables theme. The investment in ASX graphite stocks will provide exposure to the global renewable transition, which favors ESG investors. The unique advantage of this commodity is mainly due to its usage in lithium-ion batteries. The global markets for graphite are expected to grow significantly in the long run. EVs and other environmentally friendly technologies become more widely adopted.
Synthetic graphite can create a big barrier for the natural graphite industry, which is a disadvantage for investors investing in ASX graphite shares. If synthetic alternatives in place for natural graphite are created, which are considered most environmentally friendly and trade at a cheaper price than graphite, then industry can experience a major shift from the natural occurrence of graphite to the synthetic form of graphite.
ASX graphite stocks: Top companies in 2023
The potential applications of graphite in the form of anodes in lithium-ion batteries are getting investors hot under the collar. Investors who add such stocks will get exposure to the renewable theme. The graphite market is opaque; therefore, investors need to be careful and must go through advanced research work prior to investing in graphite stocks. Here are some of the ASX graphite shares to look at:
Syrah Resources Limited (ASX: SYR)
Syrah Resources Limited (ASX: SYR) has a market cap of $358.23 million and a current market price of $0.53 as of 21 October 2023. SYR is an ASX-listed industrial minerals and technology company with its flagship Balama graphite operation in Mozambique and a downstream active anode material facility in the US. Syrah commenced its natural graphite sales diversification strategy, executing multi-year binding offtake agreements for Balama natural graphite supply into the US with a 100% owned subsidiary of Graphex Group Limited.
Black Rock Mining Limited (ASX: BKT)
Black Rock Mining Limited (ASX: BKT) has a market cap of $120.68 million and a current market price of $0.11 as of 23 October 2023.The company has an 84% interest in the world-class Mahenge graphite project (Mahenge), situated in Tanzania. Mahenge has a JORC-compliant MRE of 213 million tonnes at 7.8% TGC. It also has ore reserves of 70 million tonnes at 8.5% TGC. The ore reserves support a mine life of up to 350k tonnes of graphite per year for a reserve life of 16 years. Mahenge is one of the very few graphite projects in the world expected to have both first-quartile costs and very low carbon footprint graphite products due to access to low-cost hydro-dominated grid power in Tanzania.
Talga Group Limited (ASX: TLG)
Talga Group Limited (ASX: TLG) has a market capitalization of $389.61 million and a current market price of $1.08 as of 23 October 2023. TLG is a battery anode and advanced materials company. The company produces green battery anodes and advanced materials and works with the highest-grade graphite resource globally at its mine and coated anode production facilities. TLG’s innovative technology and vertical integration of wholly owned Swedish graphite resources provide securities of supply and create additional value for stakeholders.
Renascor Resources Limited (ASX: RNU)
Renascor Resources Limited (ASX: RNU) has a market cap of $330.12 million and a current market price of $0.13 as of 23 October 2023. RNU is an Australian-based company focused on the development of the Siviour graphite project and the exploration of graphite, copper, gold, uranium, and other minerals. RNU has an extensive tenement portfolio, holding interests in the key mineral provinces of South Australia. RNU continues to accelerate the development of the graphite concentrate operation, the upstream portion of its planned BAM graphite mine and manufacturing operation in SA.
Frequently Asked Questions (F.A.Q)
What are the best graphite stocks to buy?
The Australian companies realized the need for graphite and its future importance; thereby, few companies have massively been digging to accelerate the development of the graphite concentrate operation. Some of the well-known ASX companies are Syrah Resources Limited (ASX: SYR); Black Rock Mining Limited (ASX: BKT); Talga Group Limited (ASX: TLG); and Renascor Resources Limited (ASX: RNU).
Is it worth investing in graphite?
The need for graphite globally is anticipated to grow massively on account of increasing demand for batteries for use in electric vehicles and renewable energy storage.
Who is the biggest graphite company?
One of the biggest ASX graphite producers in Australia is Syrah Resources Limited (ASX: SYR).
Does Australia have graphite mines?
South Australia contains 66% of Australia’s confirmed graphite resources, as per the Department for Energy and Mining 2022.
What is the outlook for graphite?
As per Benchmark Mineral Intelligence, the forecast for battery sector demand for raw material graphite is to rise by over 1400% between 2020 and 2050. As per the World Bank, the global graphite market is anticipated to grow to US$21.6 billion by 2027, with graphite demand increasing by 500% between 2028 and 2050. As per the International Energy Agency, renewable electricity growth is breaking all records. By 2026, renewable power capacity will match the total power capacity of fossil fuels and nuclear combined.
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